Category: Economy

A Crisis from the Top: The Unwisdom of Elites

The past three years have been a disaster for most Western economies. The United States has mass long-term unemployment for the first time since the 1930s. Meanwhile, Europe’s single currency is coming apart at the seams. How did it all go so wrong?

Well, what I’ve been hearing with growing frequency from members of the policy elite — self-appointed wise men, officials, and pundits in good standing — is the claim that it’s mostly the public’s fault. The idea is that we got into this mess because voters wanted something for nothing, and weak-minded politicians catered to the electorate’s foolishness.

So this seems like a good time to point out that this blame-the-public view isn’t just self-serving, it’s dead wrong.

The fact is that what we’re experiencing right now is a top-down disaster. The policies that got us into this mess weren’t responses to public demand. They were, with few exceptions, policies championed by small groups of influential people — in many cases, the same people now lecturing the rest of us on the need to get serious. And by trying to shift the blame to the general populace, elites are ducking some much-needed reflection on their own catastrophic mistakes.

Paul Krugman | CommonDreams.org

Thanks to Decades of Conservative Spin, Americans Are Hopelessly Confused About Taxes, Spending and the Deficit

The right’s victory in separating taxes from the services they pay for is apparent when citizens are asked what they’d like to see cut in order to cut that deficit. In January, Gallup released a poll on those specifics. They asked which of nine areas of government services they’d like to see cut. Only cutting foreign aid – which represents about two percent of the federal budget – met with the approval of a majority of those surveyed. Even majorities of Republicans opposed cuts to everything but foreign aid and arts funding.

Taken together, this shows how difficult it is for law-makers to arrive at good public policies. Their constituents wants their cake, they want to eat it, but they don’t think they need to pay the tab for it. Politicos offer tax cuts to get themselves elected, but then face outraged constituents when they try to cut services. Small wonder that we’ve only managed to balance the budget in one brief period during the boom years of the 1990s.

We do face serious issues in this country. We need a serious debate about how best to solve them. But we’re having that debate in a democracy populated by citizens who have little or no clue where their tax dollars go. And you can credit the anti-tax crusaders and their habitual mendacity for that sorry state of affairs.

Joshua Holland | AlterNet

The New Economy: Design for Life

As we restructure our human economies to support these conditions, they will increasingly mimic and integrate with the biosphere’s natural structures and processes.

Like the biosphere, the living economies we seek will self-organize within a framework of market rules. Rooted locally everywhere and dependent primarily on their own resource base, they will have built in incentives to optimize creative adaptation to local microenvironments. With the decision-making powers of ownership distributed among the community’s members in their multiple roles as producers, consumers, and citizens there will be a natural incentive to internalize costs and manage resources responsibly.

The culture of a living economy recognizes the mutual responsibility of individuals to meet their own needs in ways that contribute to the well-being of the whole and thereby optimize their own well-being. Business enterprises are expected to do the same. Making a profit is recognized as essential to the health of the enterprise, but is not its sole or primary purpose.

These outcomes are wholly beyond the reach of an economic system in which the locus of power resides in global financial institutions that recognize only financial values and seek only individual financial gain.

They depend on complex processes of self-organizing adaptation that are possible only within place-based caring communities built around institutions that nurture and reward adult responsibility and link decisions to consequences. It is fundamentally a question of life-values and shared power, both of which are long standing human ideals that we now have both the imperative and means to put into practice.

David Korten | YES! Magazine

How Wall Street Thieves, Led by Goldman Sachs, Took Down the Global Economy

We could put all the crooks in jail (and we should), but Goldman Sachs would still be there. We could tighten regulations more and more, but the big banks would still be armed with enormous wealth and power to subvert them. Regulations and jail are not good enough unless we want to construct massive regulatory and enforcement agencies that rival the banks in size and scope.

Rather, the report proves why the entire financial edifice must come down. Our nation cannot survive economically unless we do away with the large Wall Street banks and investment houses. It’s not just that they are too big to fail. They are too big – period!

AlterNet | Les Leopold

Is the world too big to fail?

Systemic risk in the financial system can be remedied by the taxpayer, but no one will come to the rescue if the environment is destroyed. That it must be destroyed is close to an institutional imperative. Business leaders who are conducting propaganda campaigns to convince the population that anthropogenic global warming is a liberal hoax understand full well how grave is the threat, but they must maximize short-term profit and market share. If they don’t, someone else will.

This vicious cycle could well turn out to be lethal. To see how grave the danger is, simply have a look at the new Congress in the U.S., propelled into power by business funding and propaganda. Almost all are climate deniers. They have already begun to cut funding for measures that might mitigate environmental catastrophe. Worse, some are true believers; for example, the new head of a subcommittee on the environment who explained that global warming cannot be a problem because God promised Noah that there will not be another flood.

Noam Chomsky | Tomdispatch.com

Dollars for Death, Pennies for Life

When the U.S. military began a major offensive in southern Afghanistan over the weekend, the killing of children and other civilians was predictable. Lofty rhetoric aside, such deaths come with the territory of war and occupation.

A month ago, President Obama pledged $100 million in U.S. government aid to earthquake-devastated Haiti. Compare that to the $100 billion price tag to keep 100,000 U.S. troops in Afghanistan for a year.

While commanders in Afghanistan were launching what the New York Times called “the largest offensive military operation since the American-led coalition invaded the country in 2001,” the situation in Haiti was clearly dire.

With more than a million Haitians still homeless, vast numbers — the latest estimates are around 75 percent — don’t have tents or tarps. The rainy season is fast approaching, with serious dangers of typhoid and dysentery.

No shortage of bombs in Afghanistan; a lethal shortage of tents in Haiti. Such priorities — actual, not rhetorical — are routine.

Last summer, I saw hundreds of children and other civilians at the Helmand Refugee Camp District 5, a miserable makeshift encampment in Kabul. The U.S. government had ample resources for bombing their neighborhoods in the Helmand Valley — but was doing nothing to help the desperate refugees to survive after they fled to Afghanistan’s capital city.

Such priorities have parallels at home. The military hawks and deficit hawks are now swooping along Pennsylvania Avenue in tight formation. There’s plenty of money in the U.S. Treasury for war in Afghanistan. But domestic spending to meet human needs — job creation, for instance — is another matter.

Norman Solomon | CommonDreams.org

The sanctity of military spending

The clear fact is that, no matter how severe are our budgetary constraints, military spending and all so-called “security-related programs” are off-limits for any freezes, let alone decreases.  Moreover, the modest spending freeze to be announced by Obama tomorrow is just the start; the Washington consensus has solidified and is clearly gearing up for major cuts in Social Security, Medicare and Medicaid, with the dirty work to be done by an independent “deficit commission.”

It’s time for “everyone” to sacrifice and suffer some more — as long as “everyone” excludes our vast military industry, the permanent power factions inside the Pentagon and intelligence community, our Surveillance and National Security State, and the imperial policies of perpetual war which feed them while further draining the lifeblood out of the country.

Glenn Greenwald | Salon

Climate, Oil, War, and Money

If a clerk at H and R Block sat down for an hour with Uncle Sam, he’d surely be reaching for the Pepto-Bismol after five minutes. We’ve been able to play games with ourselves for a whole year about the true state of our capital resources.

It is a mighty big system, kept chugging along on little more than inertia, as things will when they are headed downhill and gravity exerts its influence. But it begins to seem now like a great reeking freight train of toxic waste out-of-control on the downgrade and headed for a very nasty smash-up.

The Green Shoots crowd — a sub-category of identity maniacs, who think the USA is immune to the laws of history and physics — has made common cause with the oil and climate deniers to proclaim that we are returning to normal, back to the “consumer” orgy, the suburban sprawl nexus of McHousing and miracle mortgages, and new frontiers of corporate profit-raking.

They are tragically wrong.

Instead, we’re headed into the wildest king-hell debt workout that the world has ever seen, which will propel a lot of people used to working in air-conditioned cubicles into a world made by hand. We march day by day into the great holiday season with mortgages going unpaid and the credit cards getting cancelled and money disappearing and the fears and grievances mounting.

Pretty soon, the folks doing “God’s work” at Goldman Sachs (and their tribal kin on Wall Street) will announce their annual bonuses (because they are publicly-held companies, which have to do so).

Won’t that be a galvanizing moment for us all?

James Howard Kunstler | CLUSTERFUCK NATION

America’s Defining Choice: Endless War or Healthcare?

President Obama and Congress will soon make defining choices about health care and troops for Afghanistan.

These two choices have something in common – each has a bill of around $100 billion per year. So one question is whether we’re better off spending that money blowing up things in Helmand Province or building up things in America.

Nicholas Kristof | The New York Times

Satan Sets the Record Straight

Goldman Sachs’ Chief Executive Lloyd Blankfein’s comment that bankers are doing “God’s work” came under fire today from one of the longest-standing allies of the firm, Satan, the Prince of Darkness.

In a rare press conference, the usually reclusive Beelzebub blasted Mr. Blankfein for his remark, telling reporters, “Lloyd Blankfein needs to remember who he works for.”

Wearing his trademark red cape and carrying a smoking pitchfork, Satan refused to say exactly what if any punishment he had in mind for the Goldman Sachs chief, saying only, “Maybe it’s time for Lloyd Blankfein to have a little ‘come to Satan’ meeting.”

While Satan said he was “delighted” by the record bonuses being paid out to Wall Street executives this year, he was clearly miffed that his role in the financial firms’ successes had been largely ignored.

“Lloyd Blankfein seems to have forgotten who came up with the idea of credit default swaps, derivatives, and mortgage-backed securities,” he said. “I don’t want to sound like a diva, but how about a little respect for the guy who signs your paycheck?”

Andy Borowitz | HuffPost